Over the past five years, American farmers have received an average annual direct transfer of $30,782 (approximately ₹26.78 lakh), into their accounts from USDA. This information comes from a report submitted by the U.S. Government Accountability Office (GAO) to the Senate Committee on Agriculture and Allied Sectors on December 17, 2024.
As pressure mounts on India to open its markets for American agricultural products, the disparity in government support between the two countries is striking. The critical question remains: How can Indian farmers compete with their heavily direct cash transfer benefetiary American counterparts?
According to the U.S. Government Accountability Office (GAO) report, the U.S. government disbursed $161 billion in aid to 1 million farmers between 2019 and 2023. In contrast, Indian farmers receive only ₹6,000 annually through the PM-Kisan scheme, which is transferred directly to nearly 100 million eligible farmers. Excluding indirect subsidies, this is the only direct financial assistance provided by the Indian government.
The comparison gains significance as the U.S. continues to push India to lower tariffs on agricultural imports. While Indian markets are largely open, the dispute revolves around import duties. In response to global trade tensions, the U.S. has imposed tariffs on imports from Canada, Mexico, and China. Meanwhile, China, the largest importer of U.S. agricultural products, is reducing its dependence on American imports by boosting domestic production and sourcing from alternative sources like Brazil.
American farmers benefit from direct government assistance under the 2018 Farm Bill, which includes provisions for Price Loss Coverage (PLC), Agriculture Risk Coverage (ARC), and several programs run by the U.S. Department of Agriculture (USDA). Unlike India, where only farmers receive aid, the U.S. agricultural corporations also qualify for government assistance.
The top 10 beneficiaries of these assistance received over $17.7 million (₹147 crore) each, with the highest individual payout reaching $215 million (₹1,785 crore).
According to the GAO report, a significant portion of U.S. farm aid is directed toward crops such as corn, soybeans, cotton, rice, sorghum, and wheat. The U.S. has 1.82 million farmers, and the average annual household income of American farming families is $97,984, significantly higher than the national median household income of $80,610.
U.S. farmers receive assistance through multiple federal agencies, covering market risks, price losses, dairy and livestock support, disaster aid, insurance, and sustainability programs. The Effective Reference Price (ERP) framework compensates them for declining crop prices, while insurance covers production losses due to natural disasters or market fluctuations. The U.S. government also reimburses farmers for losses caused by international trade policies.
If India lowers import tariffs for U.S. agricultural products, Indian farmers – who receive minimal government support – will struggle to compete against their American counterparts, who receive an average of ₹26.78 lakh annually.
During his recent visit to India, U.S. Secretary for Commerce Howard Lutnick emphasized the need for India to open its agricultural market to American products. With China reducing U.S. agricultural imports, Washington is under pressure to find new markets. If the Indian government does not protect its farmers, the domestic agriculture sector could face a serious crisis.
In retaliation for U.S. tariffs on Chinese products, China imposed new import duties on U.S. agricultural goods starting March 4, 2024. The U.S.-China tariff war is already hurting American farmers. However, the 2018 Farm Bill provides them with direct financial aid, cushioning their losses. In contrast, Indian farmers receive far less government support, with nearly 30% of them excluded even from the PM-Kisan scheme.
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